Washington Is Too Rich for Our Own Good

By Stephen L. Carter -
Sep 27, 2012

The U.S. Census Bureau report
showing that seven of the nation’s 10 highest-income counties
are suburbs of Washington has raised a considerable ruckus.

“Our gilded District is a case study in how federal
spending often finds its way to the well-connected rather than
the people it’s supposed to help,” wrote Ross Douthat in the New
York Times. “The American economy has gotten more deeply
invested in influence-peddling -- broadly construed,” added Matt Yglesias in Slate. “This is driving the Washington area to the
top of the charts.”

I find the news as depressing as anyone. I also worry that
the news media, amid the fulmination, continue to miss the story
behind the story. The Washington region may have the highest
concentration of college graduates and some of the richest
counties in the U.S. But according to the Census Bureau’s recent
report on poverty, the city of Washington itself also has a
higher rate of income inequality (measured by the Gini Index (GINI))
than any state.

Like the tale of the wealthy counties, the report on
poverty continues a trend that should embarrass both political
parties. America’s poor are getting poorer, with poverty rates
remaining stubbornly above 15 percent. The poverty rate among
black Americans is a staggering 27 percent. At the same time,
the buying power of the middle class has been steadily slipping.
Let the Census Bureau tell the rest of the story:

“Median household income was $50,054 in 2011, 1.5 percent
lower in real terms than the 2010 median, 8.1 percent lower than
the 2007 (the year before the most recent recession) median
($54,489), and 8.9 percent lower than the median household
income peak ($54,932) that occurred in 1999.”

No Tears

Yet the rich aren’t getting richer. The income of the
highest earners has been shrinking far faster than the income of
the middle class, and (although here the figures lag a bit) an
estimated 30 percent of those who were in the top income
quintile in 2004 were out of it by 2007.

I am not asking that we shed tears for the top quintile,
which, despite stagnant incomes, increased its share of national
income by 1.6 percent in 2011. My point is different: As we
emerge, supposedly, from recession, only the federal government
and those seeking to influence it seem to be doing better.
That’s a terrible policy outcome.

The growing concentration of wealth in and around
Washington isn’t President Barack Obama’s fault. What we are
seeing today is the culmination of a long trend, abetted by both
parties, of concentrating ever more power -- and thus more of
those seeking to influence it -- in the federal government. (Or
maybe not the culmination: Perhaps the Washington area will
boast 10 of the 10 wealthiest counties in the near future.)

Washington is a company town. When I was growing up there,
we actually called it “the federal city” in school. Today, about
29 percent of earners in the area are government employees. As
to the rest, the great majority of high earners who live in the
area are there because the government is there. Were the
nation’s capital in Mississippi, the state would probably be the
nation’s richest rather than the poorest.

Still, at least some of blame is to be directed at the
practices of the federal government itself. Whatever the outcome
of the contentious debate over whether federal workers are paid
more than similarly situated private workers (and the smart
money seems to say, “Yes, but not by as much as people think”),
it is inarguable that the federal government attracts an
astonishing number of highly paid workers to one place. In turn,
the private sector sends in its squads of well-compensated
lawyers, lobbyists and consultants, and the result is news
stories about high-income Washington suburbs at a time when the
nation is suffering.

No Trust

The problem with the amount of money earned in and around
Washington is the mistrust it naturally causes. People are
skeptical that their votes can affect policy outcomes in any
serious way. The game looks fixed.

Suzanne Collins sets her best-selling post-apocalyptic
novel “The Hunger Games” in a country called Panem. In Panem,
the capital flourishes, absurdly wealthy, while most of the
“Districts,” as the states are called, struggle with want. I am
skeptical that the economic system portrayed in “The Hunger
Games” could actually produce the advanced technology the book
features, but the larger model -- a wealthy region stripping
resources from its suffering outlands -- is not unprecedented.
We’re not Panem, and we’re not headed there, but I would never
have imagined that the U.S. would produce a capital wealthier
than any of the states it purportedly serves.

Yet I am skeptical that this situation will reverse itself
anytime soon. The federal government’s fiscal 2012 budget is
$3.8 trillion, and the regulations the government issues
probably affect a figure at least as large. With a government
that size, it is only natural that those who have resources will
try to influence both its politics and its policy. Because the
government isn’t likely to get smaller any time soon, we might
hit that 10-of-10 figure after all.

(Stephen L. Carter is a Bloomberg View columnist and a
professor of law at Yale University. He is the author of “The
Violence of Peace: America’s Wars in the Age of Obama,” and his
most recent novel is “The Impeachment of Abraham Lincoln.” The
opinions expressed are his own.)